Shiba Inu (SHIB) experienced a brief price rally followed by a sharp reversal on May 21, as on-chain data revealed bearish whale activity and weakening market participation. The meme token climbed 3.18% intraday, reaching a local high of $0.00001492, before retracing 1.9% in the final trading hour, according to CoinDesk Research’s technical analysis model.
Whale Outflows and Weak Holder Metrics Signal Caution
Despite the short-lived rally, on-chain indicators point to deteriorating sentiment among large holders. Whale netflows dropped 311%, while the number of active addresses declined 68% compared to December 2024, signaling reduced engagement and declining transactional momentum.
Data from IntoTheBlock shows that 25.74 trillion SHIB tokens are currently clustered within the $0.000014–$0.000015 support/resistance zone, held by over 34,000 addresses, marking this as a key battleground for bulls and bears alike.
The profitability distribution remains skewed, with only 17% of holders currently in profit and over 80% still underwater. Any price increase is therefore likely to face heavy sell pressure from investors seeking to break even.
Technical Analysis: Reversal Below Key Resistance Levels
SHIB’s market structure shows signs of short-term bearish momentum:
The token is trading below the 50-day EMA, with a bearish exponential moving average (EMA) stack forming.
An emerging descending channel pattern on the hourly chart shows lower highs and lower lows, reflecting bearish sentiment.
Volume analysis identified a spike exceeding $700 million between 04:00–06:00 UTC, supporting the rally. However, a sharp 1.77% sell-off in the final hour erased gains, indicating profit-taking behavior.
A breakdown below the $0.00001417 high-volume support level was accompanied by over 110 billion SHIB in trading volume, suggesting a shift in momentum.
Burn Rate Surge Offers Limited Relief
SHIB’s 24-hour burn rate spiked by 106,040%, a notable increase in token removal from circulation. However, this has yet to translate into sustainable upward price movement, especially as the asset continues to trade below a dominant descending trendline resistance at $0.00002044.
Analysts Divided on Short-Term Outlook
Market analysts remain split on SHIB's trajectory. Some highlight the potential for a breakout if SHIB can sustain movement above $0.000016, while others emphasize the weakening fundamentals and ongoing sell pressure from long-term holders as significant barriers to upward momentum.
Until SHIB decisively breaks above the descending trendline and reclaims the 50-day EMA, traders may expect continued sideways consolidation with sharp volatility spikes.
